In some states such as Connecticut the corporate shield does not protect a corporate officer or director who has engaged in tortious conduct regardless of whether he acted in his personal capacity or in his representative corporate capacity (Salmon V. Richardson, Scribner V. O'Brien, Altieri V. Nanavati). Missing a properly indexed item in a title search is negligence, and negligence is a tort. The purpose of the e&o insurance is to protect your personal assets against negligence when the corporate shield does not. The corporate shield or LLC protect you against other forms of liability. Unless the laws of your state differ from Connecticut's,you need both the corporate shield and the insurance. It is also a good idea to explore the upper levels of insurance coverage. If the claim asserted against you exceeds to the limits of your policy, you are liable for the difference between the policy limits and the balance of the judgment. In most policies the insurance carrier reserves the right to select the law firm that represents you in the suit. Very often the policy will also provde that the law firm's legal fees, which can be substantial, are to be paid from the insurance proceeds, and this will further reduce the amount of funds available to pay the claim asseted against you. This can be a double edged sword. On the one hand your opponent is watching insurance funds diminish, and this may act as an incentive to settle the case if that is his plan. If the case settles the law firm representing you will obtain a release for you in return for payment of the settlement, and that will be the end of it. On the other hand your opponent may be looking to your personal assets (house, car, bank accounts, etc.)if he prefers to proceed to trial and judgment, and the remaining funds are insufficient to pay the judgment
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